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Hormel Foods acquired Planters less than a year ago and has already put its stamp on the iconic brand.

Some updates were ripe for the picking — like the new "plant-based protein" seal, endorsed by Mr. Peanut's signature, now displayed on its label.

It's a seemingly straightforward and obvious addition. Of course nuts are plant-based. Yet it is one of several changes Hormel has planned for the brand that its previous owners could have, but didn't, make.

The Austin, Minn.-based food maker closed on its record $3.3 billion purchase of Planters from Kraft Heinz Co. in June and has wasted no time padding Mr. Peanut's pockets with marketing dollars.

"The company has big ambitions for the brand, really focused on a growth mindset," said Rafik Lawendy, marketing director for Planters, who joined Hormel as part of the acquisition. "We're extremely excited for the resources the brand will be getting."

Onlookers agree there's more value to be extracted from Planters. The brand had gone stale despite checking the box on several trends, like protein-rich eating and increased snacking habits.

"The Planters brand had really struggled under Kraft and had lost sizable market share — we think Hormel will be successful at turning this around," said Rebecca Scheuneman, an equity analyst at Morningstar. "Planters will be one of Hormel's largest brands, so it will receive some pretty significant attention and marketing support."

Mr. Peanut and the Nutmobile cruised Burlington, Wis., in September. Hormel has “big ambitions for the brand, really focused on a growth mind-set,” said marketing director Rafik Lawendy.
Mr. Peanut and the Nutmobile cruised Burlington, Wis., in September. Hormel has “big ambitions for the brand, really focused on a growth mind-set,” said marketing director Rafik Lawendy.

Jeffrey Phelps, Invision/AP file

Refreshed packaging is slowly hitting store shelves in a "soft conversion" — old labels are being used up so as not to generate waste, said Jeff Frank, Hormel's group vice president of grocery products. New flavors and products will be unveiled in the coming months. And last week Planters shot a Super Bowl ad after Mr. Peanut missed the big game last year.

Hormel's long-term challenge will be sustaining that growth for an already ubiquitous brand in crowded snack aisles — or any food segment Planters may try to reach.

"How do we operate as a snacking brand and stretch out of the nut aisle and into different formats and distribution points?" Lawendy said. "It's our job to innovate and tell that story to consumers and be there with the right offerings."

First steps

Hormel's largest acquisition in its 130-year history marks another step away from being a commodity business focused largely on raw agricultural products. For years, Hormel has worked to reposition itself as a branded food company. By adding some sort of value to products, both profit margins and predictability tend to increase.

Company executives often bristle at being called a meatpacker. "We see ourselves largely as a protein company," Frank said.

The acquisition also brings greater distribution in places like convenience stores, where Hormel can more easily place its other snack brands alongside Planters products, Frank said.

"Snacking companies tend to be really good at salty, savory or sweet snacks — we have something in every one of those spaces," he said. "Planters really anchors our snacking portfolio."

Folding Planters into Hormel amid global supply chain breakdowns added a few headaches, though peanut prices didn't see the sharp increases other commodities suffered over the past year.

A new Hormel office is being established in Chicago, where Planters leadership will be based. Planters production facilities in California, Arkansas and Virginia are now "part of the Hormel supply chain," Frank said, with the finishing touches on the integration still underway.

Sculptor Sean Roach with his bronze Mr. Peanut statue in Atlantic City, N.J. 
Sculptor Sean Roach with his bronze Mr. Peanut statue in Atlantic City, N.J. 

MARY GODLESKI, ASSOCIATED PRESS 2006

The Corn Nuts brand, which also came with the Planters purchase, is now fully integrated and getting a lot of high-level support.

"I'm a fan of a lot of Planters products; the regular flavor of Corn Nuts is at the top of my list," Hormel CEO Jim Snee said at a Faegre Drinker M&A Conference last fall. "It has become a staple not only in the car but in my office as well."

Frank said "the team has gotten really aggressive around Corn Nuts," with sales up 24% in the last quarter compared to the same period a year ago, before the acquisition.

Next steps

Once Hormel harvests the "low-hanging fruit" of rebuilding the brand, Edward Jones analyst John Boylan said he'll be watching how Planters competes long-term with store brands.

"How can they reinvigorate growth in that category, and get consumers excited about Planters and the nut business in general?" he said.

Lawendy said nuts should be on-trend for years to come; it's a matter of convincing consumers that Planters are the "nuts of distinction."

"The peanut is a beautiful superfood that has a lot going for it, from a snacking and sustainability standpoint — it requires very little water," Lawendy said. "It's the snacking trifecta — something crave-able, good, not super processed."

That "plant-based protein" label is increasingly important for Hormel. For a company long known for Spam, chili, bacon and turkey, non-meat products now make up 25% of Hormel's sales.

Morningstar analyst Scheuneman said Hormel is eager to lean into the plant-based trend.

"It makes a lot of sense for them, because per capita pork consumption has been declining in the United States as consumers get more health-conscious."